The total amount of leases that a company has entered into that are considered as purchases of assets for accounting purposes. A capital lease is a contract that allows a company to use an asset for a specified period of time and has the economic characteristics of asset ownership. A lease is classified as a capital lease if it meets any of the following criteria: - The lease term is 75% or more of the asset’s useful life. - The lease contains a bargain purchase option to buy the asset at a price below its fair market value. - The lessee gains ownership of the asset at the end of the lease term. - The present value of the lease payments is 90% or more of the asset’s fair market value.